BYD, China’s Tesla, Is Coming for the World
China’s electric-vehicle champion BYD has sped ahead in its home market despite a bruising price war. Now it will try to export its way to even greater success. The Warren Buffett-backed Chinese automaker sold 1.8 million new-energy vehicles, including plug-in hybrids, in the first eight months of the year—an 83% rise from a year earlier.
The surging adoption of EVs in the country has helped BYD overtake Volkswagen as China’s bestselling car brand this year. Around one in three cars sold in China this year was an EV. The company reported last week that its revenue in the first half of 2023 grew 73% from a year earlier.
More impressively, it managed to expand its gross margin to 18.5% from 13.5% a year ago. That is against a background in which automakers were slashing prices in China to compete for market share. BYD’s scale and better product mix—together with proximity to China’s EV supply chain—helped.
Its vertically integrated model, with BYD making its own batteries, has helped keep its costs low. Overseas sales accounted for only about 1% of BYD’s total sales in August. But as China has become the world’s largest EV exporter, partly helped by Tesla shipping from its Shanghai factory to other countries, BYD is setting its sights abroad, too.
The company is pushing out new models to Europe. Its Atto 3 crossover sport-utility vehicles have been quite popular in countries such as Sweden. Its Seal sedan and Dolphin hatchback will start shipping to Europe later this year.
BYD’s formula for success in its home country could likely work outside China, too. UBS estimated that the carmaker has a sustainable 25% cost advantage over other legacy automakers. The bank said the BYD Seal carries a similar profit margin to
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